Uzbekistan considers developing Islamic finance sector

Uzbekistan lenders already offer some Islamic financial products, but specific legislation could make them cheaper while helping to introduce new ones.

Uzbekistan has announced plans to introduce Islamic finance regulations and setting up an Islamic finance institution to expand its banking sector as well as to tap into foreign markets in an effort to revamp the economy, reported Reuters.

The proposed legislation will be drafted with the help of a grant from the Islamic Development Bank (IDB). The proposed legislation goes beyond current statutes and will facilitate the introduction of a wide range of Shari’ah-compliant products.

Islamic finance, which follows religious principles such as bans on interest and monetary speculation, is seen as a way to help attract investments from the Middle East and Southeast Asia.

Last month, Uzbekistan’s Trustbank and InFinBank signed separate financing agreements with the Islamic Corporation for the Development of the Private sector, the private sector arm of the IDB Group.

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